Wednesday 7 April 2010 07.20 EDT
First published on Wednesday 7 April 2010 07.20 EDT

A government attempt to drastically reduce "no win no fee" payments to libel lawyers has fallen victim to a backbench rebellion and the busy parliamentary schedule as legislators scramble to push through new laws before MPs leave parliament later this week to fight the general election.

The justice secretary, Jack Straw, put forward plans to dramatically reduce the sums paid to lawyers who take on libel cases on a "no win no fee" basis.

Straw's plan was blocked last week, when Labour MPs including Tom Watson, MP for West Bromwich East, and Chris Mullin, MP for Sunderland South, joined opposition parties to vote against it on a Commons committee.

The government wanted to use a statutory instrument, an order which does not require a parliamentary vote, to reduce lawyers' fees in the event of a successful libel prosection from 100% to 10%.

It was presented to the House of Commons again yesterday, but the proposed changes were thrown out due to lack of time. The leader of the house, Harriet Harman, said yesterday the legislation was "not going anywhere".

The order can only become law if it is nodded through by MPs: any opposition means a vote is required. Answering a question from Watson, Harman indicated that there was not enough time for a vote to take place.

A spokeswoman for the Ministry of Justice confirmed that the proposed changes have now been dropped. "The Leader of the Commons has announced that the motion on the order paper is not being brought forward", she said.

"Conditional fee arrangements" make it easier for individuals to sue for libel or defamation by removing the possibility they will run up huge legal fees by bringing an unsuccessful action. But they also allow lawyers to claim success fees of 100% from losing litigants in libel actions – that is, to double their normal costs.

They were introduced to allow members of the public who cannot afford to hire expensive lawyers to bring such actions, but news organisations claim they have led to a huge increase in the number and cost of libel actions, and that the vast majority are from the wealthy and powerful.

However, Watson has argued that if the changes were enacted, lawyers would refuse to take up many cases brought by members of the public. "It is right we drive costs of cases down, but this proposal would deny access to many thousands of people," he said last week.

The Commons culture, media and sport select committee called for the proposed changes to be enshrined in law in its influential report on press standards, privacy and libel published in February.

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